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Do you know one of the best tax shelter strategies will be gone in 6 months?

on Wed, 06/15/2016 - 12:53

Here is the reason why you want to revisit getting a permanent life insurance policy (especially if you have a corporation).

Permanent life insurance policies had been regularly incorporated by financial professionals as a part of tax shelter strategy for decades. Since market crash, life insurance had been we comely used as investment strategy, NBC News' report in May 2008. Come 2017, that benefit will drop substantially. 

To make it easy to understand, when any tool allows the saving/return portion over and above its original purpose, it is an investment vehicle. Permanent life insurance is one of that. See a case study from the accountants from the CPA web site.

In Canada, our late Finance Ministry Jim Flaherty had stated on the 2012 Federal budget that the government "considers necessary to update and simplify the exemption test" (the way how much savings can be allowed in an insurance policy). Believe it or not, this whole discussion actually started in 1994. To us, it is always best to find good strategies to pay less tax, but it is of course the opposite to the government.

Many publications had been talking about this change ahead but never it become that critical. NOW is the time, if you had been procrastinating on getting your permanent life insurance in place. Even if you have already got your insurance coverage, it is best to have them reviewed every few years (especially when life changes, getting marry, having a baby, divorcing, or even death in a family).

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